I came across a document that explains how the DfT calculated the amount of the grant that Liverpool should repay in order to be able to do turnround cruises from the new terminal. Here’s a link to the relevant document on the DfT website.

As far as I can work out from the document, the reason for the difference between Liverpool’s repayment offer (about £5.3m) and the eventually-recommended figure (£8.8m) was because Liverpool City Council tried to reduce the amount that should be repaid because the new terminal wouldn’t be utilised for turnround cruises every day. However, the economics consultancy that advised the government (‘First Economics’) felt that this wasn’t a valid argument: having a terminal with the required facilities was a fixed cost for doing turnround cruises, no matter how much or how little it was used, and that the amount to be repaid could not be reduced because of (supposedly) limited utilisation.

I thought this was an interesting document. It’s interesting to see a little bit of how government works.